NBA deal or no deal: Which will Maloofs choose?

April 28, 2011

Updated Aug. 21, 2013 1:17 p.m.

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Sacramento Kings owners George, Gavin and Joe Maloof, left to right, are faced with a decision: Move to Anaheim and deal with the red tape or stay in Sacramento and deal with the red ink. STEVE YEATER, ASSOCIATED PRESS

Sacramento Kings owners George, Gavin and Joe Maloof, left to right, are faced with a decision: Move to Anaheim and deal with the red tape or stay in Sacramento and deal with the red ink. STEVE YEATER, ASSOCIATED PRESS

ANAHEIM DEAL HIGHLIGHTS

Coporate pledges: More than $30 million have been lined up (AAM also will have $13 million in premium ticket revenue guaranteed once Kings move)

Honda Center upgrade: More than $70 million in improvements and upgrades to be made

TV deal: A six-year contract worth at least $24 million annually to broadcast the team's games on a variety of networks.

It's really not surprising why the Maloof brothers apparently are struggling with the decision on whether to file for franchise relocation before Monday's deadline imposed by the NBA.

They have to choose between fights:

•If they want to move the Sacramento Kings to Anaheim, they have to fight the NBA.

•If they decide to stay in Sacramento, they have to fight the rising tide of red ink, for at least several more years.

In both cases, the odds seemed stacked against them.

The seven-member NBA relocation committee made it clear to the Maloofs during a conference call Wednesday that it is opposed to the Kings' proposed move to Anaheim because the committee has serious questions about another team joining the Southern California market in such close proximity to the Lakers and Clippers.

It also has become obvious, through recent public comments from Commissioner David Stern, that the NBA would like the Kings to remain in Sacramento at least one more year so that a feasibility study on how to build and finance a new arena can be completed and the resulting proposal can be fully investigated.

But the Maloofs have been down that road several times before and are understandably pessimistic about community support needed to secure arena funding, likely through a public-private partnership, in the state capital. Voters in Sacramento have spoken loudly in the past that they do not want public money used for a new arena.

That's presumably why George Maloof told the committee during Wednesday's conference call that the team doesn't want to go back to Sacramento and is excited about moving to Anaheim.

The Sacramento arena issue also is why the Maloofs have been negotiating for months with officials from Anaheim Arena Management, the Henry Samueli-owned company that runs Honda Center for the City of Anaheim.

Thanks to Samueli's deep pockets, Anaheim has put together a sweetheart deal that could immediately rescue the Kings from unprofitability.

Until Wednesday, the Maloofs were leaning toward filing for relocation, even in the face of so much opposition, because the deal with Anaheim seems too good to pass up.

How good is it? While Sacramento mayor Kevin Johnson recently has been trumpeting corporate pledges of more than $10 million, Anaheim Arena Management officials quietly have lined up corporate commitments that they say more than triple Sacramento's pledges. Additionally, AAM will have $13 million more in premium ticket revenue guaranteed as soon as the Kings say they are coming.

Samueli also has made these financial guarantees, according to an AAM spokesman:

•More than $70 million in improvements and upgrades at Honda Center, as requested by the league during recent visits, to make the arena "NBA-ready."

•A six-year TV contract worth at least $24 million annually to broadcast the team's games on a variety of networks.

•A personal loan of at least $75 million to the Maloofs to help cover moving costs, including the expected relocation fee.

Though the Anaheim City Council unanimously approved a proposal in late March to issue up to $75 million in lease-revenue bonds to cover the costs of arena improvements and transition costs, the AAM spokesman said Samueli instead decided to cover those costs himself after a Sacramento group gathered signatures in Anaheim to try to force a referendum on the issuances of the bonds. (Somebody in Sacramento who spent a lot of money on the signature campaign will soon have a red face.)

Samueli also has agreed to purchase a minority interest in the Kings. That, presumably, is millions more in revenue for the Maloofs.

All of which, literally, are millions of reasons for the Maloofs to file, if they choose to fight the NBA and take their chances trying to secure the 16 "yes" votes (from the 30 NBA owners) needed to approve relocation.

It's conceivable the Maloofs also could move without permission, citing antitrust laws, and dare the league to try to stop them, as Donald Sterling's San Diego Clippers successfully did by moving to Los Angeles in 1984. But the NBA amended its constitution after losing that court case and now requires that any future franchise moves must be approved by a majority of owners.

And if the Maloofs decide not to file and return to Sacramento, they will immediately face a new battle.

Even if the new arena plan to replace outdated Power Balance Pavilion gains traction, the Maloofs will have to wait several years for it to be constructed while continuing to lose money playing in what Stern recently labeled an "inadequate and on-its-last-legs" facility.

There's also a question of whether the family can afford to lose millions more waiting for a new arena. If it can't, will the Maloofs be forced to sell the franchise, perhaps to an interested billionaire such as Ron Burkle?

And if a new arena can't be built in Sacramento, will that force the family to move somewhere else or sell to someone who wants to move the team to, say, Kansas City, where a relatively new arena is waiting?

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